United Internet deal could cost DT another 2.5 million customers

7 Jun 2007

German internet firm United Internet is to offer double-play telephone and internet packages via Telefónica Deutschland’s fixed network from July, according to a magazine article in Capital, quoting United’s CEO Ralph Dommermuth. United has so far exclusively used incumbent Deutsche Telekom’s (DT) network to provide high speed internet connections. The move could cost DT as many as 2.5 million fixed line customers. According to TeleGeography’s GlobalComms database, United was Germany’s second largest ISP by subscribers at the end of 2006, with 2.27 million users. The new package over the Telefónica network will replace the existing arrangement where United’s DSL internet is sold as an add-on to DT’s fixed line service. DT, already struggling with falling prices for mobile calls and fierce competition in the domestic fixed line market, is rumoured to be planning the launch of a new budget package combining fixed line and cellular service geared to younger customers, to combat the recent haemorrhaging of wireline clients; some 2.3 million defected to rival telcos during 2006, and another 588,000 went in the first three months of 2007.